1. Promoter appealed against regulatory authority observations regarding project registration and mandatory disclosure of pending litigation under the Real Estate (Regulation and Development) Act, 2016. (Para 1 , 2 )
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2026 Supreme(Telangana) 1128
TELANGANA REAL ESTATE APPELLATE TRIBUNAL: HYDERABAD
A. Santhosh Reddy, Chairperson, P. Pradeep Kumar Reddy, Judicial Member, Vemula Sreekar, Administrative Member
M/s Mihira Buildcon, represented by its Managing Partner - Appellant
Versus
Telangana Real Estate Regulatory Authority, Represented by its Secretary/Authorised Officer - Respondent
T.A.No. 56 of 2026
Decided On : 29-10-2026
Advocates Appeared :
For the Appellant : Mr. R.A.Sumith Raj
For the Respondent : Mr. P.Nagendra Reddy
Important Points
Locus standi under Section 31 of the Real Estate (Regulation and Development) Act requires the complainant to be an 'aggrieved person' governed by the Act. Disclosure obligations under Section 4(2)(l)(B) apply only to litigation actually affecting the project site, not unrelated civil disputes.
Subject
Real Estate Law - RERA Regulatory Compliance
Act Referred
Headnote
(A) Real Estate (Regulation and Development) Act, 2016 - Sections 31 and 4(2)(l)(B) - Locus Standi - "Aggrieved person" - Interpretation - A person who is neither an allottee, promoter, nor real estate agent, and whose grievance is purely civil in nature, does not fall within the ambit of an "aggrieved person" under Section 31 of the Act - A stranger cannot meddle in proceedings unless they are regulated or governed by the Act and have suffered an injury to a right conferred under the said Act. (Paras 14, 15)
(B) Real Estate (Regulation and Development) Act, 2016 - Section 4(2)(l)(B) - Disclosure of pending litigation - Mandatory obligation to disclose encumbrances, claims, or pending litigation affecting the project land - If the promoter establishes that the project site does not fall within the schedule of the property involved in the litigation, there is no statutory obligation to disclose such pending litigation at the time of registration. (Paras 18)
(C) Real Estate (Regulation and Development) Act, 2016 - Section 60 - Penalty - Regulatory Authority cannot, upon dismissing a complaint for lack of locus standi, simultaneously record suo moto adverse observations based on the allegations in the dismissed complaint to initiate penalty proceedings without independent prima facie evidence. (Para 18)
Facts of the case:
A promoter registered a real estate project. A third party, who had filed a civil suit for specific performance of an agreement of sale regarding certain lands, filed a complaint with the Regulatory Authority alleging that the promoter had suppressed the existence of the pending civil suit during registration and was conducting unauthorized construction. The Regulatory Authority dismissed the complaint for want of locus standi but made observations that a regulatory issue regarding non-disclosure of litigation existed and directed the issuance of a show cause notice to the promoter for the imposition of a penalty. The promoter appealed against the expunction of these adverse observations.
Findings of Court:
The complainant was neither an allottee, promoter, nor agent, and his claims were purely civil, meaning he lacked locus standi as an "aggrieved person" under Section 31. Regarding the disclosure requirement, the promoter provided documentary evidence that the permitted construction site did not overlap with the property in the civil suit. Consequently, there was no obligation to disclose the litigation. The Regulatory Authority's suo moto observations and directions for a show cause notice, following the dismissal of the complaint, were found to be unwarranted and legally untenable.
Issues: Whether the complainant was an "aggrieved person" under Section 31 of the Act and whether the promoter was obligated to disclose a civil suit that did not pertain to the actual project site, and whether the Regulatory Authority could issue directions for penalty proceedings after dismissing the complaint for lack of locus standi.
Ratio Decidendi: The term "aggrieved person" under Section 31 refers to a person governed by the Act who has suffered a legal injury cognizable under the Act; purely civil disputes are to be addressed in civil courts. The mandate to disclose litigation under Section 4(2)(l)(B) is limited to litigation affecting the project land. When a complaint is dismissed for lack of locus standi, the authority cannot use the dismissed allegations to initiate penalty proceedings suo moto without establishing a prima facie case independent of the complainant's standing.
Result: Appeal allowed and the observations at paragraphs 34, 35 & 36 of the impugned Order are hereby set aside.
(B) Real Estate (Regulation and Development) Act, 2016 - Section 4(2)(l)(B) - Disclosure of pending litigation - Mandatory obligation to disclose encumbrances, claims, or pending litigation affecting the project land - If the promoter establishes that the project site does not fall within the schedule of the property involved in the litigation, there is no statutory obligation to disclose such pending litigation at the time of registration. (Paras 18)
(C) Real Estate (Regulation and Development) Act, 2016 - Section 60 - Penalty - Regulatory Authority cannot, upon dismissing a complaint for lack of locus standi, simultaneously record suo moto adverse observations based on the allegations in the dismissed complaint to initiate penalty proceedings without independent prima facie evidence. (Para 18)
Facts of the case:
A promoter registered a real estate project. A third party, who had filed a civil suit for specific performance of an agreement of sale regarding certain lands, filed a complaint with the Regulatory Authority alleging that the promoter had suppressed the existence of the pending civil suit during registration and was conducting unauthorized construction. The Regulatory Authority dismissed the complaint for want of locus standi but made observations that a regulatory issue regarding non-disclosure of litigation existed and directed the issuance of a show cause notice to the promoter for the imposition of a penalty. The promoter appealed against the expunction of these adverse observations.
Findings of Court:
The complainant was neither an allottee, promoter, nor agent, and his claims were purely civil, meaning he lacked locus standi as an "aggrieved person" under Section 31. Regarding the disclosure requirement, the promoter provided documentary evidence that the permitted construction site did not overlap with the property in the civil suit. Consequently, there was no obligation to disclose the litigation. The Regulatory Authority's suo moto observations and directions for a show cause notice, following the dismissal of the complaint, were found to be unwarranted and legally untenable.
Issues: Whether the complainant was an "aggrieved person" under Section 31 of the Act and whether the promoter was obligated to disclose a civil suit that did not pertain to the actual project site, and whether the Regulatory Authority could issue directions for penalty proceedings after dismissing the complaint for lack of locus standi.
Ratio Decidendi: The term "aggrieved person" under Section 31 refers to a person governed by the Act who has suffered a legal injury cognizable under the Act; purely civil disputes are to be addressed in civil courts. The mandate to disclose litigation under Section 4(2)(l)(B) is limited to litigation affecting the project land. When a complaint is dismissed for lack of locus standi, the authority cannot use the dismissed allegations to initiate penalty proceedings suo moto without establishing a prima facie case independent of the complainant's standing.
Result: Appeal allowed and the observations at paragraphs 34, 35 & 36 of the impugned Order are hereby set aside.
Legal Category Hierarchy
Table of Contents
2. Appellant contended the complainant lacked locus standi and that the project land was not part of the alleged suit schedule, while the complainant argued material non-disclosure of litigation. (Para 4 , 5 , 10 , 11 )
3. The authority cannot record adverse observations or direct proceedings upon concluding that a complainant lacks the locus standi to maintain a complaint under the Act. (Para 15 , 16 , 18 )
4. A regulatory authority lacks jurisdiction to issue substantive findings or penal directions against a party once it determines the underlying complaint is not maintainable for want of locus standi. (Para 18 , 19 )
5. The appeal is allowed; adverse observations and consequential directions in the impugned order are set aside. (Para 20 )
6. Can a regulatory authority render findings of non-compliance after dismissing a complaint due to the complainant's lack of locus standi?
No. Once an authority determines that a complainant is not an aggrieved person under Section 31 of the Act and dismisses the complaint, it cannot proceed to record findings on merits or issue directions. (Para 15 , 18 , 19 )
7. Who qualifies as an aggrieved person for filing a complaint under Section 31 of the Real Estate (Regulation and Development) Act, 2016?
An aggrieved person is someone regulated or governed by the Act who has suffered an injury to a legal right conferred by the Act. A stranger to the project or civil litigant without specific standing does not qualify. (Para 13 , 14 , 15 )
ORDER :
A. Santhosh Reddy, J.
The appellant/promoter has preferred this appeal against the Order, dated 22.04.2026, passed by the Telangana Real Estate Regulatory Authority, Hyderabad, (hereinafter referred to as ‘the Regulatory Authority’), in Complaint No. 368 of 2025, challenging the adverse observations made in Paragraph Nos.34, 35 and 36 of the impugned order, and prays for their expunction.
2. The learned Regulatory Authority, while dismissing the aforesaid Complaint No.368 of 2025 filed by the 2nd respondent herein (Complainant) for want of locus standi, made the following observations at Paragraph Nos.34, 35 and 36 of the impugned order:
“34. Notwithstanding the dismissal of the complaint for want of locus standi, the Authority is of the considered view that a distinct regulatory issue arises on the face of the record. Section 4(2)(l)(B) of the Real Estate (Regulation and Development) Act, 2016 (for brevity ‘the Act’) casts a mandatory obligation upon every promoter to disclose, at the stage of registration, all pending litigations pertaining to the project land. This statutory obligation operates independent of the identity or maintainability of the complainant and is not rendered otiose by the subsequent lapse of the project registration. The lapse of registration may have a bearing on the exercise of powers under Section 7 relating to revocation; however, it does not obliterate or condone any omission or misrepresentation at the time of obtaining registration. Consequently, the conduct of the promoter, insofar as it relates to compliance with disclosure requirements, remains amenable to regulatory scrutiny by this Authority.
35. The record prima facie discloses that O.S. No. 42 of 2008 (renumbered as O.S. No. 373 of 2022), involving the project land, was subsisting at the time the Respondent applied for and obtained registration of Project “CSR 99” (Registration No. P00300002756) in March 2021. No disclosure of this pending litigation appears to have been made in the application for registration. If established, such non- disclosure would attract a penalty under Section 60 of the RE(R&D) Act, which provides that a promoter who provides false information or contravenes the provisions of Section 4 shall be liable to a penalty extending up to five percent of the estimated cost of the project.
36. Accordingly, the Secretary, TG RERA, is directed to issue a Show Cause Notice to the Respondent, M/s. Mihira Buildcon, represented by its Managing Partner Chada Sukesh Reddy, calling upon the Respondent to show cause why a penalty under Section 60 of the Act should not be imposed for alleged non-disclosure of the pending civil suit O.S. No. 373 of 2022 at the time of registration of Project “CSR 99”, in contravention of Section 4(2)(l)(D) of the Act. The Show Cause Notice shall be issued within fifteen (15) days from the date of this order, and the matter shall be placed before this Authority for appropriate orders thereafter”.
3. Brief facts of the case, as stated by the 2nd respondent/complainant in the Complaint, are that the Complainant has filed a suit being O.S. No. 42 of 2008 (renumbered as O.S. No. 373 of 2022) before the I-Additional District Judge at Hanamkonda, seeking Specific Performance of Contract against the original vendors, who were subsequently set ex parte. During the pendency of the suit, M/s Avinash & Sukesh Constructions, represented by its managing partners Chada Sukesh Reddy, Chada Pushpak Reddy, Chada Shailaja Reddy, and Chada Rameshwar Reddy, who were arrayed as defendants Nos. 4 to 8 in the said suit, established a new entity, M/s Mihira Buildcon, and registered a project titled “CSR 99” with the Regulatory Authority under Registration No. P00300002756, covering the lands in Survey Nos. 539/A, 540, 541, 543, 550 and 620, Plot Nos. 1-1-27/7(P) & 1-1-27/14, Hanamkonda. While applying for RERA registration, they deliberately suppressed the existence of the said civil suit, violating Section 4(2)(l)(B) of the
